Somehow, I over looked this terrific article by Doug Kass, comparing poker with trading.

Here’s a few bullet points:

• Understand when to play aggressively. It’s the winning way. Don’t be a tight or loose player/trader; be a solid one and recognize when it is time to press your bets/positions. To attain superior returns in poker and investing over the long run, grind it out (in stocks until you are up 30%-40%, and then if you have convictions, go for a 100% year). If you can avoid losing and put together a few 100% years, you can achieve outstanding long-term investment performance.

• Tells: Look for them, and you will find them. Poker players and stock markets have tells — giveaway moves that are very revealing. Learn to recognize them. History is your textbook. (For example, improving corporate financials usually presage a rally; conversely, deteriorating financials usually augur poor market performance.)

• Art and science … it takes both. Both activities are more art than science — that’s why they are so difficult to master. Knowing what to do is about 10% of the game. Knowing how to do it is the other 90%.

• Money management. The same sound principles of money control apply to the business of tournament/professional poker and to successful investing. The way to build long-term returns or poker winnings is through preservation of capital and home runs.

This was originally published on the very expensive Street Insight; It since ahs been moved to the free site — so go see the entire piece.

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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